While artificial intelligence has dominated headlines as a key factor in job cuts across India’s IT sector, a deeper structural shift is unfolding. The rapid rise of Global Capability Centres is quietly reshaping the industry and challenging the traditional outsourcing model that once powered companies such as TCS, Infosys, and Wipro. Experts believe that the GCC boom represents a “deeper problem” that Indian IT services firms have yet to address.
GCCs are in-house technology hubs set up by multinational companies in India, allowing them to directly insource technology operations instead of relying on third-party IT providers. The model offers better control, integration, and long-term cost efficiency. Once limited to back-office functions such as IT support and data entry, GCCs now handle advanced work including AI, cybersecurity, analytics, and research and development.
India is now home to over 1,700 GCCs employing nearly two million people. Their revenue has grown at 11 per cent CAGR since 2015, outpacing the 8 per cent CAGR of leading Indian IT firms. GCCs also contribute 23 per cent to the country’s IT exports. Companies including UBS, Bank of America, and Procter & Gamble began shifting towards this model in 2013. Even Citibank, which once sold its captive units to Indian IT firms, is now rebuilding its own technology centres in the country.
While AI is contributing to layoffs, especially in mid-level roles focused on testing, infrastructure, and people management, the GCC boom is amplifying the impact. GCCs are automating routine tasks internally, reducing reliance on outsourced services. As a result, Indian IT firms are losing both talent and contracts, with the traditional pyramid structure of mid-level coders flattening.
The warning signs were visible years ago. In 2015, then Infosys CEO Vishal Sikka invested in ANSR, a company that helped foreign firms set up GCCs. However, Infosys later exited the investment at a loss, and the broader industry failed to act. With remote work becoming the norm and digital transformation accelerating, GCCs are now thriving while traditional IT giants are struggling to adapt.
Industry experts suggest that Indian IT companies need to reposition themselves as GCC enablers, offer “GCC-as-a-service,” upskill employees for AI-integrated roles, and rethink business models to stay relevant in a market where clients increasingly want direct control.
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